Legislation is changing on 1 October regarding the licensing of Houses in Multiple Occupation (HMO) – a change that will have a significant impact on local government and landlords.

On 1 October 2018, new legislation will come into force that will have a significant impact on the owners of HMOs and councils alike. Until now, property licensing for HMOs has been limited to any property (house or flat) occupied by three or more people comprising two or more households who share facilities (kitchen, bathroom and/or toilet).

Under the new arrangements, all HMOs occupied by five or more people will need to be licensed throughout England. Government estimates suggest an extra 160,000+ properties will need to be licensed. This means a significant amount of properties will need to complete a lengthy application form and be inspected by council officers. Some councils will see a 200% increase on workload, whilst others, such as central London councils, already have tens of thousands of HMOs to license each year. Costs for an HMO Licence vary from a few hundred pounds to thousands of pounds, depending in what part of the country the HMO is located.

The process of applying for a licence can vary considerably and is not always straightforward. In some areas of the country, you must phone the council during office hours, ask for an application form and wait for it to arrive by post. The form is then completed by hand and, if you want to take a copy prior to submission, you may need a trip to the local library to use the photocopier. Then, of course, there’s the risk of paperwork getting lost in the post whatever the case it can be a long, slow and arduous process.

Alternatively, some councils provide an application form that you can download and complete at home before emailing it back to the council. It is slightly more convenient, but still not ideal and it can involve printing a fair amount of paperwork and a lot good deal of admin time once the application is sent to the council.

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Interestingly, a survey conducted in July by Rocktime, a software developer based in Poole, Dorset found that almost 50% of London Boroughs were yet to offer an integrated online application process. That figure was even lower in other parts of the country.

Rocktime’s Public Sector Account Director Martin Bradbury commented: “We believe that local authorities should be embracing digital transformation through the introduction of cloud solutions that are designed for simplicity and ease of use – a system available 24/7 and integrated with their payment system to provide a seamless application process for both citizens and council alike and benefitting from bottom line administration costs.”

Bradbury adds that when choosing software local authorities need to look for solutions that are futureproof whilst specifically making the online application process as simple and stress-free as possible for the licensee, whilst reducing back office administration and enabling applications to be processed more efficiently by council officers. Helping to keep the cost per licence to a minimum.

Under pressure

The HMO deadline comes at a time when the private rental market and the role of councils in its control is coming under increased scrutiny.

A recent University of York review, which can be read in full here, stated that millions of private housing tenants have been failed over the past decade through poor policy-making and a lack of strategy, which in turn is generating calls for local authorities to do more to root out criminal landlords.

The review, funded by the Nationwide Foundation, is a detailed, independent analysis of who lives in private rented housing, how their needs are being met and the impact of policy interventions over the last 10 years.

It comes a decade after Dr Julie Rugg and David Rhodes, from York’s Centre for Housing Policy, published their original review of the private rented sector – the first to look in detail at how it functioned.

The main findings include:

Current regulation of the sector is ‘confused and contradictory’ and ‘failing at multiple levels’. Opportunities for linkage and simplification are being missed, with tenants and landlords unsure of their rights and responsibilities

Poor conditions are a problem at both ends of the market – 1 in 5 homes let at the top 20% of rents are non-decent, to 1 in 3 let at the bottom 20%. Conditions get worse the longer tenants are in their property, indicating that poor property management rather than old housing stock is the root cause

Changes to welfare reform are creating a ‘slum tenure’ at the bottom end of the market as more tenants are unable to afford to meet their current rent levels or find accommodation without the help of statutory or third sector agencies

Policy interventions are increasingly focused on helping higher and middle-income renters priced out of ownership, with little or no help for those on low incomes

Responding to the review, the Residential Landlords Association (RLA) outlined how it would like to see councils committing to rooting out the criminal landlords that give the sector a bad name. The association, which contributed to the report, said it is time local authorities showed strong political leadership and used powers already at their disposal to tackle the ‘rogues’.

David Smith, policy director for the RLA said: “Whilst the Government’s own data shows that 84 per cent of private tenants are satisfied with their accommodation, no one should have to face living in sub-standard accommodation.

“With RLA research showing that there are well over 100 Acts of Parliament regulating the sector, the problem is with the enforcement of these laws.

“We are calling on councils to provide the political leadership needed to use the extensive powers they have to find and root out the minority of landlords who are criminals and have no place in the market.”

He continued: “We agree with concerns about the complexity of the legislation surrounding the market. Tenants, landlords and local authorities all need to clearly understand their roles, responsibilities and the powers available to tackle poor housing. For many this has become difficult to achieve.

“A root and branch review of all regulations affecting the sector needs to be carried out to understand if they are achieving what was originally intended. There is no point passing new laws and regulations if the existing ones are not being enforced properly.”